According to the report, more than half (52%) of human resources executives surveyed in May said their companies had decided to slash or freeze pay, more than double the 27% of companies using the same cost-cutting techniques in January.
Executives listed as many as 13 different measures they’re currently using to cut expenses, but they’re not necessarily using these techniques in place of layoffs. Survey results revealed that the companies which had gone through layoffs were more likely to use cost-cutting methods than companies that had not.
Slashing benefits, pay, and perks allows companies to lower their labor costs without cutting workers. Layoffs can create a major challenge when the economy begins to recover and employers are short on trained workers. "It is a lot easier to restore compensation and benefits that it is to rehire and retrain workers when the economy improves," says John Challenger, chief executive of Challenger, Gray and Christmas. (U.S. News & World Report)
The percentage of employers making permanent cuts fell since the beginning of the year, from 56% in January to 43% in May, according to the survey. Altogether, 86% of executives said their companies were implementing cost-cutting measures, which is slightly better than in January when 92% of organizations were slashing costs.
Has your company been able to avoid layoffs by implementing other cost-cutting measures, such as salary reductions or freezes? Leave a comment and let us know what worked for your organization.